Shares in easyJet PLC (LSE:EZJ) and British Airways owner International Consolidated Airlines Group SA (LSE:IAG) gained altitude on Monday as oil prices dropped.
Benchmark Brent fell by 2.9% to US$72.48 a barrel over the course of the morning as traders mulled the ramifications of a strike by Israel against Iran on Saturday.
These had targeted military sites across Iran, following a strike by the latter earlier in the month, prompting relief given attacks avoided the likes of nuclear and oil facilities.
Scope market analyst Joshua Mahony dubbed the response “relatively limited” from Israel.
“[It] appears to have drawn a line under the issue, easing fears of a wide-scale regional conflict between two military powers,” he said.
“The cherry on top, Iran didn’t vow to respond, in a clear sign of de-escalation - or at least not a re-escalation - of the tensions in the region,” Swissquote Bank's Ipek Ozkardeskaya added.
XTB analyst Kathleen Brooks noted airline stocks in particular were set to benefit on the back of the drop in oil prices, which will in turn feed through to lower fuel costs.
Indeed, easyJet led risers on the FTSE 100 on Monday with a 3% gain, while IAG followed with a 1.8% climb.
It comes as concerns over a supply glut in the coming months have largely prevented oil from surging recently, despite the tensions in the Middle East.
"Prices have now retraced [from] most of the early October China stimulus and Iran supply risk boost, weighed down by sluggish demand and the risk of rising supply of currently unwanted barrels from OPEC+ next month," Saxo Strategy analysts said.
IAG was up 1% at 213.7p, while easyJet climbed 1.9% to 516.2p.